Hyundai Motor (KRX:005380) has asked Dave Zuchowski, the Chief Executive of their American operations to go, following the fourth consecutive year of profit declines. Dave has already resigned from the position. No reason why he was asked to go has been disclosed officially, though. Jerry Flannery, the chief counsel, has been asked to take over as the interim CEO till the time someone new is found.
Dave first joined the business in 2007 and has been the CEO of their US operations since the beginning of 2014. Initially, it looked good, as Hyundai was gaining strongly, in spite of the fact that recession was pulling down the car sales numbers.
Problems Faced By Hyundai in the US
But it has been a different story this year. The sales growth has come down to a mere 2 percent, and Hyundai’s market share has also stalled. Most of this small growth has also come from sedans where the margins are lower than the SUVs.
In fact, the market share has never been higher than 4.5 percent in the last three years. However, observers are saying that this is not the only reason why Dave was removed from the top position. Dave was asked to go also because of the problematic launch of Hyundai’s luxury Genesis brand.
Hyundai US has faced problems in launching the luxury Genesis brand in 2016. The company tried to rebrand the vehicle and also their Equus models, however, the overall sales in the United States still fell.
The business has been suffering elsewhere as well, and not just the United States. Together with its affiliate Kia Motors (KRX:000270), the group is the world’s fifth-largest automaker by sales. Once, they used to set the pace globally. However, in recent times, business has been hit because of a slowdown in emerging markets, and also because consumers are moving away from their mainstay sedans.
Could There Be More Changes at Hyundai Motor Soon?
Hyundai has removed their China head and South Korea sales chief as well over the last few months. Other senior executives of the company might also be told to go soon. Some observers are saying that another round of shakeup is imminent just after Christmas.
Hyundai Motor (KRX:005380) wants to grow strongly again, though they are likely to miss their global sales targets yet again this time. The aim was to improve the combined global sales of Kia and Hyundai by 1.5 percent in 2016.